What is the time limit for car accident claims in CA?March 24, 2012 11:19 AMSubscribe

What are the next steps I should take after receiving a lowball offer from other party's insurance?

Last summer (June 2011), I was injured in a car accident where the other driver ran his red light and totaled my car. Witnesses at the scene said it was his fault, and the driver himself admitted it was his fault. The police report confirms this. I bought a new car and spent June-December getting treated for injuries, which amounted to a couple thousand dollars. I've finally heard back from the other party's insurance, and their initial offer is extremely low. They did say there is room for negotiation after I asked, but if we cannot come to a fair number, is it too late to hire a PI lawyer? Would it be worth it? Both I and the other driver have State Farm.

I'm just wondering if anyone knows whether there is a time limit for these kinds of claims to be settled. I'm worried that hiring a lawyer will prolong the process even further and the claim will "expire" or something. If anyone knows what a fair settlement claim is, I'd appreciate the info. I'd heard it should be 3x the amount of medical expenses, but I don't know if that's true or not. I'm in California.

If there's a website or reputable resource you could point me to that explains the law regarding this issue, that would also be helpful.

Oh, and if anyone knows of a good PI lawyer in the Bay Area, please let me know!

It should be noted here that the offending party is only liable for the actual harms to you and not a cent more. When you hear about people settling for more than their medical expenses (plus cost of car), that's typically because the offending party wants the claim to end now rather than continuously pay medical claims for the indefinite future. In other words, when a settlement is reached for more than actual costs, the settlement is to account for future medical expenses and not a windfall for the injured party.

When deciding whether or not you think the offer is a lowball offer, you should consider what your future costs are. Do you expect the medical costs you've incurred to potentially continue, for instance, due to unseen injury? If so, then the offer should include those costs. If not, then there's no particular reason for the other party to offer more than what you've paid, because they're not obligated to pay anything more than that.

This is not to say whether or not your offer is an appropriate. However, simply saying "3x medical expenses" is not a useful rule of thumb. In an ideal world, an insurance settlement would exactly cover the costs incurred to you by the offending party. To be clear, the offending party has incentive to offer less than that, which is where the ambiguity comes in.posted by saeculorum at 11:30 AM on March 24, 2012

No, it's not too late to get a lawyer. The fact that you haven't gotten one at this point may mean that you've made some statements or done some things that haven't been particularly helpful for your case, though, so you'll have to deal with that.

Whether it's worlthwhile to get a PI lawyer depends on what your potential recovery is, as the PI lawyer will typically get a third of what you recover plus a settlement. It's possible that engaging a lawyer at this point will allow you to increase the settlement sufficiently to make it work without going through litigation. Like, say they're offering $4000, and the best you can negotiate to without engaging a lawyer is $6000. $9000 for a settlement that a lawyer negotiates for you would be your break even point, since he'll get a third.

If the other driver has admitted fault and the evidence is reliable that he ran a red light, it's highly likely your case will settle, provided you don't insist on a number far too high (I mean, the insurance company isn't going to settle a $10-20k claim for $100k). But, otherwise, the insurance company has an incentive to avoid litigation if the driver has admitted fault (barring some other kind of defense they might have).

One thing to think about is that you have no idea how much this case "should" settle for. A PI lawyer will have a much better idea. So, yes, focus on seeking recommendations for PI lawyers in the Bay Area. While I love MeFi, I'd really mine your personal network for this recommendation--ask friends, colleagues, family. Only if that fails would I turn to the internet for this sort of recommendation.posted by MoonOrb at 11:36 AM on March 24, 2012

Sorry, I see that the title for your question also asked for the statute of limitations for a personal injury claim in California. It's two years:

Within two years: An action for assault, battery, or injury
to, or for the death of, an individual caused by the wrongful act or
neglect of another.posted by MoonOrb at 11:42 AM on March 24, 2012

It sounds like it is worth a consultation with a reputable PI lawyer. They will tell you whether they can help you in a way that makes economic sense given the amounts at issue. It is true that the PI lawyer will probably be paid on a percentage of what you recover - so you will want to be very concrete in the consultation about what you are likely to recover and how much of it will go to the lawyer. If it is not much better than what you are being offered now, than it may not be worth it to engage a lawyer, but that's a decision to make after the consultation.

Hiring a lawyer will not lead to your claim expiring because the lawyer will know the statute of limitations and, if necessary, will get a claim on file with the courts before the time limit expires. Once your claim is on file, it does not expire.posted by Mid at 1:32 PM on March 24, 2012

I meant "a third of what you recover in a settlement plus expenses." Which is to say, if the insurance company is offering you $10k, and with a lawyer you can settle for $15k, even after the lawyer takes his $5k cut, the lawyer got more if he incurred expenses. His or her cut and what the expenses are will be spelled out in the agreement you sign with the lawyer.

And, by the way, I have no idea what this "three times medical expenses" rule of thumb is. As has been pointed out, the settlement is to compensate you for the total cost of this to you: how will it affect you in the future? Maybe this 3x med expenses is a handy way to estimate this, but it's not evidence-based.posted by MoonOrb at 1:39 PM on March 24, 2012

It should be noted here that the offending party is only liable for the actual harms to you and not a cent more.

True, but non-economic damages like pain and suffering are recognized as being actual damages over and above invoiced medical expenses. Juries routinely award damages in excess of actual billed medical expenses.

It may well be worth consulting with a plaintiff's lawyer. Pretty much all of them will do an initial consultation for free. And most of them have a sliding scale of compensation, e.g., 20% if they settle without filing suit, 33% if they have to file suit, 40% if it goes to trial, etc. The better firms settle most of their cases without filing suit, so I'd take a look at it.

The statute of limitations is a concern, but you've likely got some time. This is not legal advice, as the statute of limitations varies from state to state, but two years is a pretty common period for this sort of thing. So you're probably not too late, but you do want to get on that sooner rather than later. These things always take longer than you think.posted by valkyryn at 2:29 PM on March 24, 2012

Never too late for a lawyer - do it today.

I've told this story before, but here it is anyway:
I was in an accident that wasn't my fault. I was hurt, and my vehicle was totaled. The insurance company wanted to settle for something like $3000 plus the cost of replacing my vehicle. I went to a lawyer.

6 months later I settled for $60K (in addition to the cost of a new vehicle), of which the lawyer took 30%. This covered the $15K for my surgery and medical expenses, with a nice bonus.

The insurance company doesn't talk to you without representation. You shouldn't talk to them without it, either.

It should be noted here that the offending party is only liable for the actual harms to you and not a cent more.

Bullshit. The amount you're entitled to will depend on where you are, and the precise language of your insurance policy.posted by coolguymichael at 9:16 PM on March 24, 2012 [1 favorite]

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